When you started your business with a business partner, you felt that the relationship would be good long-term. It would help the company succeed and the two of you would be able to get along.
Unfortunately, that has not happened. Maybe you have experienced a lot of personal conflict or maybe your business partner just doesn’t seem like a good fit and they are holding the company back. Is it possible to fire them and either take over as sole business owner or replace them with a different business partner?
A complex process
If you want to fire employees – unless they have official contracts – you can generally do it whenever you want. These employees may operate under at-will employment laws, meaning they can be fired for any legal reason, at any time.
However, your business partner is not an employee, so you can’t fire them. You may be able to sit down with them – and/or with a mediator – and talk about the issues or ask them if they would consider stepping aside. But you can’t give them a pink slip or tell them that Friday is their last day on the job.
Even if they do agree to leave the business, they are still a co-owner. Do they own 50% of the company? You may need to buy that ownership share from them if you want to take over as the sole owner of the business. Once again, this is much different than simply firing an employee.
Because this process is so complicated, and because the future of your business hangs in the balance, be sure you are well aware of all of your legal options at this time.